Professor O'Kane's report, the culmination of 19 months of investigations, last Tuesday found that despite coal seam gas development inevitably having "unintended consequences", the risk to human health and the environment could be managed.

Jones told his 2GB listeners last week that Professor O'Kane had previously warned about the possible health danger posed by the industry, adding "don't tell me the mining industry have got to the NSW Chief Scientist as well".

Professor O'Kane strongly rejected the allegation. She told Fairfax Media on Sunday she had been advised the comment was defamatory and was "considering my legal options".

The report's findings have emboldened the coal seam gas industry, which is piling pressure on the NSW government to relax regulations protecting communities and water supplies.

Advertisement

Magnum Gas and Power chairman Tom Fontaine, whose organisation has been forced to shelve plans to drill for coal seam gas in the water catchment between Sydney and Wollongong, said decisions by authorities were being driven by "fear-mongers and politics".

The Planning Assessment Commission concluded last year the project, a joint venture with Apex Energy, was too uncertain and should not be reconsidered until government policy was finalised.

"If there were any chance of aquifer or drinking water contamination we would not proceed," Mr Fontaine said.

"The only CSG toxic gas leak that I am aware of is the toxic idiot gas that blasts from the hole in Alan Jones' face whenever he talks on the subject of coal seam gas".

Jones declined to comment on those remarks. A spokesman said he could not be reached for comment on Professor O'Kane's potential legal action.

Meanwhile, Premier Mike Baird is facing calls from within his own party for more stringent regulations in light of the report's findings.

Liberal Heathcote MP Lee Evans, whose electorate takes in the Apex Energy proposal, has written to Mr Baird asking for a permanent ban on coal seam gas activity in water catchment "special areas" that protect water supply. A temporary moratorium is presently in place.

Mr Evans told Fairfax Media the ban had substantial support among other government backbenchers. He claimed Apex Energy, which is seeking government support to revive its Illawarra project, "haven't covered themselves with glory … they've never put an argument forward of how they were going to protect our water catchment".

Mr Fontaine accused Mr Evans of "playing to people's fears to get attention and votes".